Matrix Multifamily San Francisco Report – Winter 2019
A lull in the metro's multifamily construction activity has boosted rents 3.9 percent year-over-year through October to $2,662, nearly double the national figure.
Fueled primarily by technology and health care, the Bay Area economy continues to expand, boosting rental demand along the way. The tepid construction activity and softening deliveries have pushed rents up 3.9 percent year-over-year through October to $2,662, nearly double the $1,420 national average.
Employment growth is accelerating, with the metro adding 56,700 jobs in the 12 months ending in September for a 1.7 percent uptick. It’s a stronghold for tech, but the professional and business services sector led growth with the addition of 17,800 positions, while education and health services gained 13,200 jobs. A notable development in the works is Mission Rock, led by Tishman Speyer and the Giants baseball team. The public-private collaboration includes the port, city and county of San Francisco, and is set to transform a 28-acre waterfront parcel into a mixed-use neighborhood with some 1,400 residential units and 1.4 million square feet of office space.
Roughly 2,700 units came online in the first 10 months of 2018, but an additional 19,647 apartments were underway as of October. Following rent growth, investor interest is also on the upswing: Transaction volume in the first 10 months of the year totaled $1.8 billion, already surpassing the 2017 annual increase.